Cross-industry innovation relies on environments where diverse actors can collaborate, share ideas, and co-create solutions. In this way, this study examines the middleground as a dynamic ecosystem that bridges formal institutions and grassroots initiatives, enabling trust-building, relational structures, and adaptive interactions. Through an in-depth case study of the Saxony Association of Cultural and Creative Industries (SACCI), we explore how cultural dynamic relational structures, cultural embeddedness, and knowledge-sharing mechanisms contribute to fostering collaboration between creative and cultural industries (CCIs) and traditional industries. Our findings highlight the middleground’s role in addressing challenges such as brain drain and fragmented networks in post-transition regions, offering actionable insights for fostering innovation and regional socio-economic development.